25 August 2016

Shortly after this year’s Federal budget it
dawned on me that the Government’s proposal to scrap the energy supplement for
new claimants of certain transfer payments (eg, Newstart allowance) would
actually make them worse off than if the supplement had never been introduced
in the first place. To draw attention to this issue, on 4 May I started what
has been an ongoing series of posts about it on Twitter, along with a more
detailed blog post on 14 May.

Since then I’ve been writing to MPs, Senators,
Ministers and their parties about it, as well as journalists in the major media
outlets, mainly via Twitter. I’ve also chatted (in the good old fashioned
verbal way!) with a few people about it over the intervening months.

These efforts have shown me that it can
actually be a bit difficult for some people to get their head around how it’s
possible to remove a no-longer-needed extra bit from a payment and in doing so have
people end up with less than the original, pre-extra bit, amount. So here’s
another go at explaining it; one that doesn’t use pictures or tables or
discussions about the CPI. It’s a vast simplification compared to what is
actually going on, but the essential mechanism is there…

13 May 2016

Note: This post has been amended since originally posted to include a table of examples.

One of the measures announced in the Government's 2016 budget was the abolition of 'carbon compensation' payments for those newly claiming a range of welfare payments, including Newstart allowance. Originally referred to as clean energy supplements, but later renamed energy supplements by the Government, they were brought in by Labor to offset the increase in costs caused by the introduction of carbon pricing. The removal of said pricing makes the supplements redundant and so their abolition has a certain logic. However, if the removal goes ahead as announced, the rates of payments for new applicants will actually be less than if compensation for carbon pricing had never been introduced.

As an example, for a person claiming the (usual) lower single Newstart allowance rate, this will mean their payment is not just $8.80 a fortnight less than current recipients (who get to keep the energy supplement), but $3.60 less than it would have been had there been no carbon tinkering. Let that sink in for a moment - in spite of seemingly endless calls for the rate of Newstart allowance to be increased, the Government is proposing to reduce it to less than its pre-carbon price compensation value.

15 April 2016

After posting in a few discussion forums, and finding I was unable to paste in a chart or two to make my point, I've decided to try having a 'reference' post which is a kind of chart repository. I can then put links to it in forum posts.

I envisage that as a post it will be rather free of text, so won't make for much of a read. I also intend to add charts to it as I need them (and to update them). Don't forget - if the charts appear a bit small, you can select them individually and they will open separately, and, I hope, larger.

The family/household types for which charts are currently available are:

single Newstart allowance (age <60)

single age pension (age 65+)

couple, single income, both Newstart allowance (both aged < 55)

single (age <60), parenting payment, 2 children (6, 8)

single Newstart allowance (age <60), 2 children (8, 10)

couple, single income, both Newstart allowance, one with partial capacity for work (would have been disability support pension pre-July 2006, both aged <60), 3 student children (16, 18, 20)

couple, single income, one Newstart allowance, one age pension (one aged 60-64, one aged 65+)